:00:00. > :00:00.Now for the latest financial news with Sally Bundock
:00:00. > :00:20.Italy votes "No" in the referendum, and as promised, Prime Minister
:00:21. > :00:30.We assess what's at stake for Europe's economy.
:00:31. > :00:33.The new connection between the Hong Kong and Shenzhen stock
:00:34. > :00:53.We will take you there for all the latest. Hello, and welcome.
:00:54. > :00:58.Also in the programme, President-Elect Donald Trump
:00:59. > :01:05.Italy has voted a resounding "No," rejecting the electoral reforms put
:01:06. > :01:08.forward in the referendum brought by Prime Minister Matteo Renzi,
:01:09. > :01:11.who has since announced his intention to resign.
:01:12. > :01:14.The result has ushered in a fresh crisis for the Eurozone,
:01:15. > :01:17.with one of the founder members of the European project mired
:01:18. > :01:30.Here's a look at some of the problems facing the country:
:01:31. > :01:35.The economy has barely grown over the last eight years,
:01:36. > :01:42.and is likely to remain the slowest in Europe.
:01:43. > :01:49.Meanwhile, public debt is around 130% of GDP.
:01:50. > :01:52.In other words, the economy doesn't sell and produce enough goods to pay
:01:53. > :01:57.That's about 2% above the Eurozone average of 9.8%.
:01:58. > :02:00.Youth unemployment is nearly among young people is almost 39%.
:02:01. > :02:04.In other words, almost four out of every ten young people
:02:05. > :02:15.The IMF estimates that Italian banks are holding around $400 billion
:02:16. > :02:25.This amounts to about one-third of all bad loans in the euro area.
:02:26. > :02:28.More than 75% of these are loans to companies.
:02:29. > :02:32.Now that we have a "No" vote, we could see the failure of up
:02:33. > :02:35.Prime Minister Matteo Renzi's bank bailout programme
:02:36. > :02:40.One-fifth of loans in the banking system are categorised as troubled.
:02:41. > :02:42.After the vote was announced, Matteo Renzi announced his
:02:43. > :02:45.resignation and said he had no regrets about
:02:46. > :03:05.TRANSLATION: Today's Italian democracy is based on a
:03:06. > :03:07.parliamentary system. We proposed to simplify the system, eliminate
:03:08. > :03:14.separate assemblies, and broaden the areas of Iraq democracy. This is the
:03:15. > :03:21.reform were brought to the referendum. -- direct democracy. I
:03:22. > :03:26.am sorry, but I do away with no regrets. We fought the good fight
:03:27. > :03:32.with passion and determination. It was obvious and evident from day
:03:33. > :03:35.one. My experience and is here. With me is Doni Imeri, a country
:03:36. > :03:44.risk analyst for IHS-Markit. It is good to see you. We heard from
:03:45. > :03:50.Matteo Renzi. He said he would resign if the result was no and he
:03:51. > :03:56.has followed through. The euro is sinking. What do you think will
:03:57. > :04:01.happen? The markets will have a mixed reaction. To some extent
:04:02. > :04:07.markets have been anticipating this. They were also anticipating
:04:08. > :04:16.containment plans from Italy and the EU. But the ECB is likely to extend
:04:17. > :04:22.its asset purchase programme so as not to repeat 2012. The main risk is
:04:23. > :04:26.to bank shares and what happens to it ali in banks. Italian banks are
:04:27. > :04:35.under considerable strength. -- Italian banks. They have to offload
:04:36. > :04:39.loans. The minimal requisite for this is political stability. It is
:04:40. > :04:45.precisely that which they might lack right now unless there is a quick
:04:46. > :04:50.caretaker government that might stabilise the situation. In terms of
:04:51. > :04:55.the Italian economy, it has been in a difficult place for quite some
:04:56. > :04:58.time, hasn't it? That is why politicians are having a tough time
:04:59. > :05:04.in Italy. Caucus through what needs to happen in the short-term to
:05:05. > :05:09.prevent, you know, a collapse of Italian banks and the economy as a
:05:10. > :05:13.whole in the EU. -- talk us through stability plan has been to have a
:05:14. > :05:17.private-sector rescue plan for the banks, creating a second market for
:05:18. > :05:23.the purchase of non-performing loans. If pressure keeps heaping on
:05:24. > :05:28.the banking sector today and in coming days, there could be a
:05:29. > :05:31.situation where the Italian government has to inject capital
:05:32. > :05:38.into the banking system to stabilise it. The private sector bailout of
:05:39. > :05:42.banks is all right, but who wants to buy from the private sector? That is
:05:43. > :05:47.the problem. Exactly. It will be much more difficult to attract
:05:48. > :05:54.investors at this particular juncture. We might have such a
:05:55. > :05:57.situation where the state has to intervene. The fallout of such an
:05:58. > :06:05.intervention would entirely depend on what they agree with the European
:06:06. > :06:11.Commission and what rules will apply and whether bond rules will have to
:06:12. > :06:15.take a hit. If they do, there has to be, they would have to be some sort
:06:16. > :06:20.of compensation scheme going on. Unless they want to avoid a surge in
:06:21. > :06:30.popularity for antiestablishment parties. Thank you for your time and
:06:31. > :06:36.giving us a sense of what we can expect in the weeks ahead. We will
:06:37. > :06:38.be looking at that later on the BBC. Join us to see how markets begin
:06:39. > :06:40.their day in Europe. The long-awaited connection
:06:41. > :06:43.between the Hong Kong and Shenzhen Foreign investors can now buy
:06:44. > :06:47.mainland Chinese shares in nearly Chinese investors can access
:06:48. > :06:51.Hong Kong listed companies. For the latest, let's cross over
:06:52. > :06:53.to Helier Cheung who's Helier Cheung is our
:06:54. > :07:09.reporter in Hong Kong. Helier Cheung, it is good to see
:07:10. > :07:12.you. Tell us how it is going. It is the first day. Tell us why the
:07:13. > :07:18.authorities have linked the two up the pillow yes. It is the first day.
:07:19. > :07:25.Earlier we had a launch which was very busy. Quite a lot of people are
:07:26. > :07:28.happy about the stock connect and some newspapers have called it an
:07:29. > :07:34.historic day. Why have they been linked out? China once to
:07:35. > :07:37.nationalise the Yuan and internationalise its markets and
:07:38. > :07:42.attract more investment. You might remember earlier this year the MSCI
:07:43. > :07:48.index decided not to include Chinese indexers. They said they were
:07:49. > :07:52.worried about access ability issues with the Chinese market. This will
:07:53. > :07:58.be seen as a step that will help combat that and improve that. On the
:07:59. > :08:02.Hong Kong side, Hong Kong sees itself as a link between China and
:08:03. > :08:08.the rest of the world. This morning, the Chief Executive, CY Leung, said
:08:09. > :08:11.it will connect international and national wealth. What is the
:08:12. > :08:18.interest like from outside of Hong Kong and China in what is listed in
:08:19. > :08:25.gems and? -- Shenzen. At the start of this year we were influenced by
:08:26. > :08:31.the casino-style trading in China. It is extremely volatile. Last year
:08:32. > :08:35.it plunged by 14%. The level of interest depends on who you talk to.
:08:36. > :08:44.Some feel investors will be put off by it volatility. Others say it has
:08:45. > :08:50.long-term potential. Thank you so much, Helier Cheung. Live from the
:08:51. > :08:51.Stock Exchange in Hong Kong. Let us squeeze in other stories.
:08:52. > :08:54.US President-Elect Donald Trump says he will impose punitive taxes on US
:08:55. > :08:56.firms that move manufacturing overseas.
:08:57. > :08:59.Mr Trump promised a 35% tax on products sold in the US by any
:09:00. > :09:01.business that fired American workers, and built
:09:02. > :09:05.Firms should be "forewarned prior to making a very expensive
:09:06. > :09:08.Mr Trump has promised to help blue-collar workers,
:09:09. > :09:10.as well as reduce taxes and regulations on businesses.
:09:11. > :09:13.Donald Trump has also strongly attacked China in a series
:09:14. > :09:16.He complained about China devaluing its currency,
:09:17. > :09:20.Last week, Mr Trump was criticised for taking a phone call
:09:21. > :09:23.from the President of Taiwan, an island the US hasn't had
:09:24. > :09:30.diplomatic ties with for almost 40 years.
:09:31. > :09:34.The US Army has decided not to allow an oil pipeline to cross under
:09:35. > :09:37.a reservoir on land it controls in North Dakota in a move
:09:38. > :09:41.The Standing Rock Sioux Tribe hailed an "historic decision" and said
:09:42. > :09:43.it was "forever grateful" to President Obama.
:09:44. > :09:45.Instead, the US Army Corps of Engineers will look
:09:46. > :09:48.at alternative routes, a statement by the campaigners said.
:09:49. > :09:50.The Sioux have been protesting since April against the pipeline
:09:51. > :09:54.That is a quick look at international business stories.
:09:55. > :09:58.The euro is at a 20 month low against the dollar. I will see you
:09:59. > :09:59.soon. Some communities in Britain
:10:00. > :10:01.are becoming increasingly divided as they become more ethnically
:10:02. > :10:05.diverse, according to a review